Global-E Online Ltd.

Welcome to the Global E fourth quarter and full year 2023 earnings announcement conference call. This call is being simultaneously webcast on the company's website in the investor relations section under news and events. For opening remarks and introductions, I will now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you and good morning. With me today from Global E are Amir Shloket, co-founder and chief executive officer, Ofra Karin, chief financial officer, and Nir Devi, co-founder and president. Amir will begin with a review of the business results for the fourth quarter and full year of 2023. Ofra will then review the financial results for the fourth quarter and full year of 2023, followed by the company's outlook for the first quarter and full year of 2024. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate expectations and views of future events. These forward-looking statements are subject to risks, uncertainties, and assumptions some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in Our Perspectives Filed with the SEC on September 13, 2021, and other documents filed with or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, level of activity, performance, and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we make no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise after the date on which the statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release dated February 21, 2024, for additional information. In addition, certain metrics we will discuss today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operating decision making. For more information on the non-GAAP financial measures, please see the reconciliation table provided in our press release dated February 21, 2024. Throughout this call, We provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release dated February 21, 2024. I will now turn the call over to Amir, co-founder and CEO.

Thank you, Erika, and welcome everyone to our fourth quarter and full year 2023 earnings pool. 2023 was a record-breaking year for us here at Globally, and it was brought to a great close by a fourth quarter, which was our strongest quarter ever, crossing for the first time a milestone of over $1 billion of GMV within a single quarter. We finished Q4 with a record $1.19 billion in GMV, up 42% year-on-year, and record revenues of over $185 million, up 33% year-on-year. supported by the strong performance of our merchants over the holiday sales period, including Black Friday and Cyber Monday. The adjusted gross profit margin for Q4 was 42.7%, up 140 basis points from the same quarter of last year. And our adjusted EBITDA margin was 19%, or $35.2 million, our highest ever in a single quarter, reflecting nearly 62% growth compared to the same quarter of last year. Such increased profitability yielded an accelerated cash generation, with the business generating $93.5 million in operational cash flows in Q4. Looking at the full year of 2023, GMV came in at close to $3.56 billion, an increase of over 45% year-on-year. And revenue for the full year came in at $570 million, an increase of over 39% year-on-year. Annual adjusted gross profit increased even faster, growing by almost 46% from 2022, reaching roughly $245 million and representing an adjusted gross profit margin of 42.9% for the full year, an increase of nearly 190 basis points year on year. Finally, adjusted EBITDA for the full year was $92.7 million, up more than 90% compared to $48.7 million last year, representing our continued commitment to delivering durable yet profitable growth, thanks to the high efficiencies and tight cost controls. Last but not least, we finished the year with more than $300 million of cash and cash equivalents on our balance sheet, providing a solid foundation for the continuation of our fast and profitable growth trajectory and for the realization of our strategic plans going forward. As we reflect on these strong annual financial results and the substantial growth we managed to generate, it is important to remember that these were achieved while we faced a challenging and at times volatile macroeconomic environment, further exuberated by the challenges presented by the ongoing war in Ukraine, as well as the aftermath of the horrific Hamas terrorist attack on October 7. Our hearts go out to all those who were affected by these events, and we continue to provide all possible support to our team members and their families in both Israel and Ukraine. As such, we could not be more proud of our incredible team members across all our offices and locations worldwide for having navigated all these challenges so successfully, and could not be more thankful to the thousands of merchants who entrust us with their business every hour of every day. Beyond the strong financial growth and figures, 2023 was also another pivotal year for us in terms of the substantial leaps we took forward along all our long-term strategic pillars, as we continue to enrich and develop our various offerings. First and foremost, we continue to onboard and add many new brands across the globe to the large portfolio of enterprise brands we work with, as global direct-to-consumer online trading continues to be a strategic priority for brands worldwide. We are not just the leader in global direct-to-consumer e-commerce. We are also the only true global player in the market. We already support 31 different outbound markets. And last year alone, we actively shipped packages to 224 distinct destination countries and territories around the world. We quite literally enable our merchants to sell to anyone in nearly every place on Earth. As an example of this continued expansion, Just this last quarter, we launched with Glossier, 11 by Venus Williams, and Perfect Moment in the U.S., with Phantom Wallet in Canada, with Whistles and the Harry Potter store by Warner Brothers in the U.K., with Mugler and L'Oreal brand, Jean-Paul Gaultier and Ledger, a leading crypto wallet brand all in France, with Etoile and Modes in Italy, with Luavis in the Netherlands, with Jet Set in Germany, with Ideal in Belgium, with Zenerob in Australia, with Salt Murphy and Avacomore in Hong Kong, and with Retouch in Japan, just to name a few of the many brands that went live with us in the last quarter of 2023. During Q4, we also went live with Stellar Equipment out of Sweden, as well as with God Save Queens, our first Polish merchant, further extending our geographic outreach. Besides adding new merchants, we also continue to expand the scope of our business with existing merchants and merchant groups. Just this last quarter, Adidas, Nobuo, and the Koopas all extended the list of markets operated through Globally. Triangle Swimwear went live with an additional brand called Casa Del Mar, and Kylie Jenner went live with another of her brands, the fashion brand KHY. From a product perspective, looking back at 2023, we introduced many new features and key developments into our enterprise platform. Those included improved support for pre-orders via tokenization, support for cryptocurrency payments via our new integration with Crypto.com, support for orders which include items fulfilled from different countries as part of a single order, support for several new countries in our multi-local offering, integrations into new platforms such as Wix.com, and much more. Alongside these, we continue to work towards the launch of our enhanced demand generation offering, based on the assets and capabilities we acquired as part of the border-free transactions. and expect the first major parts of this exciting new offering to be released towards the second half of the year. Moreover, as we have discussed in earlier quarters, during 2023, we also invested considerable resources in harnessing the new and transformative technology of generative AI to enhance the quality and efficiency of various aspects of our business. The most recent example of such a successful implementation comes in the form of our shopper-facing customer services. After several months of beta testing, and before the recent peak trading season, we introduced into production our new automated customer service chatbot, based on OpenAI's ChatGPT technology, which has been securely connected to our systems and databases, thereby enabling many of our shoppers to receive highly accurate answers to their support queries in real time, without a need for human intervention. We believe this is a manifestation of the tremendous business value such technologies can unlock over the next few years. Another area in which we have made great progress during 2023 was our strategic relationship with Shopify. The agreement for which was renewed for another year during Q4. On the enterprise side, we have all but finalized the migration of all our legacy install base onto the new native integration. In addition, Our support for Shopify's new checkout extensibility feature has gone into general availability since January, 2024. We have a significant number of merchants already running on this new and improved checkout with GlobalEase cross-border capabilities seamlessly embedded within it. On the Shopify Markets Pro side, which went into general availability in the US in September, we continue to see an encouraging adoption rate. with more and more merchants every week effortlessly switching it on and going global. Between these positive early signs and the exciting roadmap of new features and capabilities we are working on together with Shopify, we believe that the innovative Shopify Markets Pro offering has the potential to grow significantly over the next few years. In summary, we are extremely pleased with our achievements and results for 2023. And we are equally excited towards the many opportunities for growth that await us in 2024 onwards across all our strategic growth pillars. As Ofer will elaborate on when he presents our guidance for 2024, we expect our strong growth momentum to continue this year with around 32% of annual growth expected in both GMV and revenues. And with that, I will hand it over to Ofer to dive deeper into our quarterly and annual financial results, as well as our outlook for Q1 and for the full year of 2024.